CalSTRS Looking to “Re-initiate” Global Commodities Strategy

This week, we covered CalSTRS’ internal discussions about moving to a risk mitigation strategy, partially by moving up to $20 billion out of stocks.

But there are shifts elsewhere in the fund’s portfolio, as well; the pension fund is looking to invest $150 million in global commodities for a three-year “test run” of the asset class.

From Reuters:

Almost a year after its chosen commodity investment manager shut down, CalSTRS, one of the country’s largest public pension funds, is now looking at another firm to manage some of a $150 million allocation it earmarked in 2013, a spokesman said.

“CalSTRS is in the process of reinitiating its commodities strategy,” Ricardo Duran, spokesman for CalSTRS, or the California State Teachers’ Retirement System, told Reuters on Thursday.

“Once CalSTRS gets the portfolio on its feet we will monitor its performance for no less than three years,” he said, after which the committee will decide whether to abandon the strategy, test drive it more, or include it into its permanent portfolio.

The fund views commodities as potentially important diversifier beyond the usual stock-bond portfolio and a hedge against inflation, Duran said. Initially it will invest in futures and other derivatives, he said.

CalSTRS is the county’s second-largest public pension system, managing $191 billion in assets.

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